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Compute the value of ordinary bonds

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Compute the value of ordinary bonds under the following circumstances assuming that the coupon rate is 0.06:(either the correct formula(s) or the correct key strokes must be shown here to receive credit).

Kd=0.10, n=20

Kd=0.02, n=20

Explain completely why the first bond sells for less than $1000 and the second bond sells for more than $1000. What rate of return will each bond yield if it is purchased at the price you compute and it is held until maturity?

Reference no: EM132200112

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